Abstract

The path to a sustainable management of the urban water cycle requires the assessment of both operational and quality-adjusted efficiency in a unified manner. This can be done by the use of non-radial Data Envelopment Analysis models. This study used Range Adjusted Measure models to evaluate the operational, quality-adjusted, and operational quality-adjusted efficiency (O) scores of the Chilean water industry including water leakage and unplanned interruptions as undesirable outputs. It was found that on average water utilities presented large O scores over time. The mean O score was 0.964 which means that water utilities could further reduce costs and undesirable outputs by 3.6% on average, while trying to expand the scale of operation. This finding suggests that excellent quality-adjusted efficiency at an efficient expenditure could be feasible. It was also evidenced that customer density, mixed water resources, and ownership influenced the O of Chilean water companies.